Bankruptcy in Rockford, IL

Are you contemplating bankruptcy or hiring a bankruptcy attorney in Rockford, Illinois? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.

Types of Bankruptcy in Rockford, Illinois

Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Rockford, IL to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.

Depending on the circumstances of your case, you may need to appear at hearings in the U.S. Bankruptcy Court in Rockford.

Chapter 7 Bankruptcy

Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Rockford  who can help you to decide if a liquidation plan is right for you.

Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.

The Illinois State Bar Association states that debtors should receive credit counseling 180 days before a petition. The purpose of this step is to allow you to consider other solutions with fewer long-term consequences than Chapter 7. Additional requirements and forms to get someone from Rockford started can include:

• Voluntary petition and $335 filing fee
• List of creditors and amounts owed to each one
• Current amount and frequency of your income
• Accounting for all of your personal property
• Cost of monthly living expenses

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.

The Illinois Attorney General states that Chapter 11 often works well for businesses or individuals that don’t qualify for Chapter 13. An additional advantage is that you can still discharge a significant amount of your pre-bankruptcy debts as part of the process. Creditors do get a vote on your plan, but a judge from Rockford can ignore their opinions and grant the petition regardless.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Rockford, IL after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to a five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.

If you receive approval for Chapter 13 bankruptcy in Rockford, you will make payments to the Office of the Chapter 13 Trustee. According to general information from their website, creditors then receive payments via Electronic Fund Transfer (ETF). The legal process requires absolute accuracy, and any missing information can result in a denial of your petition. You can avoid a refiling fee and wasting hours of your time by working with an attorney to ensure your paperwork is spotless.

The Bankruptcy Process in Rockford, Illinois

There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.

In Rockford to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets, and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.

Rockford debtors can choose from exemptions under Illinois law or U.S. Code currently. Whether you will benefit more from taking federal or state options depends on your financial situation.

For example, both offer a wildcard option to choose any possessions up to a certain amount. The State of Illinois allows up to $4,000 to debtors, but the federal government has additional considerations. The standard exemption is $1,325, but that can increase to $12,575 worth of any unused homestead exemption.

At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.

Work With an Experienced Rockford, Illinois Lawyer

Hiring a local bankruptcy lawyer in Rockford during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts can be discharged or can’t be discharged. An experienced Illinois attorney can also offer you guidance to improve the outcome of your case.

Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Rockford can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Illinois state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!